An employee at the Korea Stock Exchange Market smiles in front of an electronic stock board in Seoul, South Korea, 19 Sep 2008World stock markets are soaring Friday on news the U.S. government is formulating a plan to rescue banks from the bad debts at the center of the U.S. financial crisis.

Tokyo's Nikkei index gained nearly four percent, while Hong Kong's Hang Seng index earned more than 9.5 percent. China's Shanghai index also closed more than nine percent higher, after the government lifted a tax on purchasing shares.

Shares are also trading higher across Europe, with Russian markets reopening after being closed two days. Trading was briefly suspended after stocks rose too sharply at the start of today's session.

U.S. Treasury Secretary Henry Paulson revealed officials were discussing legislation to deal with "the systemic risk and stresses" late Thursday after meeting with House Speaker Nancy Pelosi and other high-ranking officials and lawmakers.

Senate Majority Leader Harry Reid said he expects the Bush administration will send a proposal to lawmakers soon.

Fears of a global financial meltdown forced the U.S. Federal Reserve and other major central banks early Thursday to pump hundreds of billions of dollars into the world's financial markets.

The banks hoped the move would help restore the confidence of investors.

U.S. stock market indexes soared about four percent late Thursday following reports of the government's plans.

It was the biggest one-day percentage gain for the indexes in six years and nearly recovered the steep losses of the previous day.

Earlier this week, the Federal Reserve gave an $85 billion emergency loan to bail out the world's biggest insurance company, American International Group (AIG). AIG nearly collapsed after major losses in the housing crisis.
Some information for this report was provided by AFP, AP and Reuters.

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